Correlation Between Hartford Moderate and Franklin Moderate
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate and Franklin Moderate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hartford Moderate and Franklin Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Moderate Allocation and Franklin Moderate Allocation, you can compare the effects of market volatilities on Hartford Moderate and Franklin Moderate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hartford Moderate with a short position of Franklin Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Franklin Moderate.
Diversification Opportunities for Hartford Moderate and Franklin Moderate
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Hartford and Franklin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Franklin Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Moderate and Hartford Moderate is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hartford Moderate Allocation are associated (or correlated) with Franklin Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Moderate has no effect on the direction of Hartford Moderate i.e., Hartford Moderate and Franklin Moderate go up and down completely randomly.
Pair Corralation between Hartford Moderate and Franklin Moderate
Assuming the 90 days horizon Hartford Moderate Allocation is expected to generate 1.01 times more return on investment than Franklin Moderate. However, Hartford Moderate is 1.01 times more volatile than Franklin Moderate Allocation. It trades about 0.38 of its potential returns per unit of risk. Franklin Moderate Allocation is currently generating about 0.35 per unit of risk. If you would invest 1,304 in Hartford Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Hartford Moderate Allocation or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hartford Moderate Allocation vs. Franklin Moderate Allocation
Performance |
| Timeline |
| Hartford Moderate |
| Franklin Moderate |
Hartford Moderate and Franklin Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Franklin Moderate
The main advantage of trading using opposite Hartford Moderate and Franklin Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate position performs unexpectedly, Franklin Moderate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Moderate will offset losses from the drop in Franklin Moderate's long position.| Hartford Moderate vs. Eventide Healthcare Life | Hartford Moderate vs. Health Biotchnology Portfolio | Hartford Moderate vs. Highland Longshort Healthcare | Hartford Moderate vs. Allianzgi Health Sciences |
| Franklin Moderate vs. Jennison Natural Resources | Franklin Moderate vs. Oil Gas Ultrasector | Franklin Moderate vs. Clearbridge Energy Mlp | Franklin Moderate vs. Alpsalerian Energy Infrastructure |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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